Amos Tversky

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Amos Tversky
Amos Tversky.jpg
Born
Amos Nathan Tversky

(1937-03-16)March 16, 1937
DiedJune 2, 1996(1996-06-02) (aged 59)
NationalityIsraeli
Alma mater University of Michigan
Hebrew University
Known for Prospect theory
Heuristics and biases
Spouse(s)
(m. 1963)
Awards MacArthur Award
Grawemeyer Award in Psychology (2003)
Military career
AllegianceIsrael
Service/branch Israel Defense Forces
Rank Seren (Captain)
Battles/wars
Scientific career
Fields Cognitive psychology, Behavioral economics
Institutions Hebrew University
Stanford University
Doctoral students

Amos Nathan Tversky (Hebrew : עמוס טברסקי; March 16, 1937 – June 2, 1996) was an Israeli cognitive and mathematical psychologist and a key figure in the discovery of systematic human cognitive bias and handling of risk.

Contents

Much of his early work concerned the foundations of measurement. He was co-author of a three-volume treatise, Foundations of Measurement. His early work with Daniel Kahneman focused on the psychology of prediction and probability judgment; later they worked together to develop prospect theory, which aims to explain irrational human economic choices and is considered one of the seminal works of behavioral economics.

Six years after Tversky's death, Kahneman received the 2002 Nobel Memorial Prize in Economic Sciences for the work he did in collaboration with Amos Tversky. [1] (The prize is not awarded posthumously.) Kahneman told The New York Times in an interview soon after receiving the honor: "I feel it is a joint prize. We were twinned for more than a decade." [2]

Tversky also collaborated with many leading researchers including Thomas Gilovich, Itamar Simonson, Paul Slovic and Richard Thaler. A Review of General Psychology survey, published in 2002, ranked Tversky as the 93rd most cited psychologist of the 20th century, tied with Edwin Boring, John Dewey, and Wilhelm Wundt. [3]

Early life and education

Tversky was born in Haifa, British Palestine (now Israel), as son of the Polish-born veterinarian Yosef Tversky and Lithuanian Jewish Jenia Tversky (née Ginzburg), a social worker who later became a member of the Knesset representing the Mapai (Workers' Party). [4] Tversky had one sister, Ruth, thirteen years his senior.

Tversky's mother has said he was self-taught in many areas, including mathematics. [5] In high school, Tversky took classes from literary critic Baruch Kurzweil, and befriended classmate Dahlia Ravikovich, who would become an award-winning poet.

Tversky received his bachelor's degree from Hebrew University of Jerusalem in Israel in 1961, and his doctorate from the University of Michigan in Ann Arbor in 1965. He had already developed a clear vision of researching judgement. [5]

Military service and career

During this time he was also a member and leader in Nahal, an Israel Defense Forces program that combined compulsory military service with the establishment of agricultural settlements. [6]

Tversky served with distinction in the Israel Defense Forces as a paratrooper, rising to the rank of captain and being decorated for bravery. [4] He parachuted in combat zones during the Suez Crisis in 1956, commanded an infantry unit during the Six-Day War in 1967, and served in a psychology field-unit during the Yom Kippur War in 1973. [6]

Academic career

Academic roles

After his doctorate, Tversky taught at Hebrew University. He then joined the faculty of Stanford University in 1978, where he spent the rest of his career.

Academic work

Work with Daniel Kahneman

Amos Tversky's most influential work was done with his longtime collaborator, Daniel Kahneman, in a partnership that began in the late 1960s. Their work explored the biases and failures in rationality continually exhibited in human decision-making. [6] Starting with their first paper together, "Belief in the Law of Small Numbers", Kahneman and Tversky laid out eleven "cognitive illusions" that affect human judgment, frequently using small-scale empirical experiments that demonstrate how subjects make irrational decisions under uncertain conditions. (They introduced the notion of cognitive bias in 1972. [7] ) This work was highly influential in the field of economics, which had largely presumed rationality of all actors. [8]

According to Kahneman the collaboration 'tapered off' in the early 1980s, although they tried to revive it. [9] Factors included Tversky receiving most of the external credit for the output of the partnership, and a reduction in the generosity with which Tversky and Kahneman interacted with each other. [10]

Comparative ignorance

Tversky and Fox (1995) [11] addressed ambiguity aversion, the idea that people do not like ambiguous gambles or choices with ambiguity, with the comparative ignorance framework. Their idea was that people are only ambiguity averse when their attention is specifically brought to the ambiguity by comparing an ambiguous option to an unambiguous option. For instance, people are willing to bet more on choosing a correct colored ball from an urn containing equal proportions of black and red balls than an urn with unknown proportions of balls when evaluating both of these urns at the same time. However, when evaluating them separately, people are willing to bet approximately the same amount on either urn. Thus, when it is possible to compare the ambiguous gamble to an unambiguous gamble people are averse — but not when one is ignorant of this comparison.

Notable contributions

The shape of the value (utility) function in prospect theory. The asymmetry of the function corresponds to loss aversion. Value function in Prospect Theory Graph.jpg
The shape of the value (utility) function in prospect theory. The asymmetry of the function corresponds to loss aversion.

Approach to research

Kahneman said that Tversky "had simply perfect taste in choosing problems, and he never wasted much time on anything that was not destined to matter. He also had an unfailing compass that always kept him going forward. [12]

Tversky's 1974 Science article with Kahneman on cognitive illusions triggered a "cascade of related research," Science News wrote in a 1994 article tracing the recent history of research on reasoning. Decision theorists in economics, business, philosophy and medicine as well as psychologists cited their work. [13]

Recognition

In 1980 he became a fellow of the American Academy of Arts and Sciences. [6]

In 1984 he was a recipient of the MacArthur Fellowship, and in 1985 he was elected to the National Academy of Sciences. [14] Tversky, as a co-recipient with Daniel Kahneman, earned the 2003 University of Louisville Grawemeyer Award for Psychology. [15]

After Tversky's death, Kahneman was awarded the 2002 Nobel Memorial Prize in Economic Sciences for the work he did in collaboration with Tversky. Nobel prizes are not awarded posthumously. [1]

Personality and characteristics

Kahneman has said "Amos was the freest person I have known, and he was able to be free because he was also one of the most disciplined." [16]

Persi Diaconis, a professor of mathematics at Stanford, has said "You were happy being in his presence. There was a light shining out of him." [13]

Gerhard Casper, a professor of Behavioral Sciences at Stanford, said Tversky "maintained the highest standards of professional ethics", and "His dedication to Stanford and its institutions of faculty governance was exemplary." [13]

Whilst being very collaborative, Tversky also had a lifelong habit of working alone at night while others slept. [17]

In intellectual debate Tversky "wanted to crush the opposition". [18] [19]

Tversky believed that humans live under uncertainty, in a probabilistic universe. [20]

Personal life

In 1963 Tversky married American psychologist Barbara Gans, who later became a professor in the human-development department at Teachers College, Columbia University. [6] They had three children together.

He died of a metastatic melanoma in 1996. [21]

He was a Jewish atheist. [22]

Tversky intelligence test

As recounted by Malcolm Gladwell in 2013's David and Goliath: Underdogs, Misfits, and the Art of Battling Giants , Tversky's peers thought so highly of him that they devised a tongue-in-cheek one-part test for measuring intelligence. As related to Gladwell by psychologist Adam Alter, the Tversky intelligence test was "The faster you realized Tversky was smarter than you, the smarter you were." [23]

The Undoing Project

Michael Lewis's book The Undoing Project: A Friendship That Changed Our Minds , released in 2016, is about Tversky's personal and professional relationship with Daniel Kahneman. [24]

Related Research Articles

A heuristic, or heuristic technique, is any approach to problem solving or self-discovery that employs a practical method that is not guaranteed to be optimal, perfect, or rational, but is nevertheless sufficient for reaching an immediate, short-term goal or approximation. Where finding an optimal solution is impossible or impractical, heuristic methods can be used to speed up the process of finding a satisfactory solution. Heuristics can be mental shortcuts that ease the cognitive load of making a decision.

Bounded rationality is the idea that rationality is limited when individuals make decisions. In other words, humans' "preferences are determined by changes in outcomes relative to a certain reference level". Limitations include the difficulty of the problem requiring a decision, the cognitive capability of the mind, and the time available to make the decision. Decision-makers, in this view, act as satisficers, seeking a satisfactory solution, rather than an optimal solution. Therefore, humans do not undertake a full cost-benefit analysis to determine the optimal decision, but rather, choose an option that fulfils their adequacy criteria.

Daniel Kahneman Israeli-American psychologist

Daniel Kahneman is an Israeli psychologist and economist notable for his work on the psychology of judgment and decision-making, as well as behavioral economics, for which he was awarded the 2002 Nobel Memorial Prize in Economic Sciences. His empirical findings challenge the assumption of human rationality prevailing in modern economic theory.

Behavioral economics Academic discipline

Behavioral economics studies the effects of psychological, cognitive, emotional, cultural and social factors on the decisions of individuals and institutions and how those decisions vary from those implied by classical economic theory.

Prospect theory Theory of behavioral economics and behavioral finance

Prospect theory is a theory of behavioral economics and behavioral finance that was developed by Daniel Kahneman and Amos Tversky in 1979. The theory was cited in the decision to award Kahneman the 2002 Nobel Memorial Prize in Economics.

The conjunction fallacy is a formal fallacy that occurs when it is assumed that specific conditions are more probable than a single general one.

Richard Thaler American economist

Richard H. Thaler is an American economist and the Charles R. Walgreen Distinguished Service Professor of Behavioral Science and Economics at the University of Chicago Booth School of Business. In 2015, Thaler was president of the American Economic Association.

Simulation heuristic

The simulation heuristic is a psychological heuristic, or simplified mental strategy, according to which people determine the likelihood of an event based on how easy it is to picture the event mentally. Partially as a result, people experience more regret over outcomes that are easier to imagine, such as "near misses". The simulation heuristic was first theorized by psychologists Daniel Kahneman and Amos Tversky as a specialized adaptation of the availability heuristic to explain counterfactual thinking and regret. However, it is not the same as the availability heuristic. Specifically the simulation heuristic is defined as "how perceivers tend to substitute normal antecedent events for exceptional ones in psychologically 'undoing' this specific outcome."

The MIT Department of Economics is a department of the Massachusetts Institute of Technology in Cambridge, Massachusetts.

Hersh Shefrin is a Canadian economist best known for his pioneering work in behavioral finance.

Barbara Tversky is a professor emerita of psychology at Stanford University and a professor of psychology and education at Teachers College, Columbia University. Tversky specializes in cognitive psychology.

Attribute substitution, also known as substitution bias, is a psychological process thought to underlie a number of cognitive biases and perceptual illusions. It occurs when an individual has to make a judgment that is computationally complex, and instead substitutes a more easily calculated heuristic attribute. This substitution is thought of as taking place in the automatic intuitive judgment system, rather than the more self-aware reflective system. Hence, when someone tries to answer a difficult question, they may actually answer a related but different question, without realizing that a substitution has taken place. This explains why individuals can be unaware of their own biases, and why biases persist even when the subject is made aware of them. It also explains why human judgments often fail to show regression toward the mean.

Nobel Memorial Prize in Economic Sciences Economics award

The Nobel Memorial Prize in Economic Sciences, officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, is an economics award administered by the Nobel Foundation. Although not one of the Nobel Prizes established by Alfred Nobel's will in 1895, the winners of the Prize in Economic Sciences are chosen in a similar way, are announced along with the Nobel Prize recipients, and the prize is presented at the Nobel Prize Award Ceremony. As a result, it is commonly referred to as the Nobel Prize in Economics.

Heuristics is the process by which humans use mental short cuts to arrive at decisions. Heuristics are simple strategies that humans, animals, organizations and even machines use to quickly form judgments, make decisions, and find solutions to complex problems. Often this involves focusing on the most relevant aspects of a problem or situation to formulate a solution. While heuristic processes are used to find the answers and solutions that are most likely to work or be correct, they are not always right or the most accurate. Judgments and decisions based on heuristics are simply good enough to satisfy a pressing need in situations of uncertainty, where information is incomplete. In that sense they can differ from answers given by logic and probability.

<i>Thinking, Fast and Slow</i> 2011 book by Daniel Kahneman

Thinking, Fast and Slow is a 2011 book by Israeli psychologist Daniel Kahneman.

Extension neglect is a type of cognitive bias which occurs when the sample size is ignored while evaluating a study in which the sample size is logically relevant. For instance, when reading an article about a scientific study, extension neglect occurs when the reader ignores the number of people involved in the study but still makes inferences about a population based on the sample. In reality, if the sample size is too small, the results might risk errors in statistical hypothesis testing. A study based on only a few people may draw invalid conclusions because only one person has exceptionally high or low scores (outlier), and there are not enough people there to correct this via averaging out. But often, the sample size is not prominently displayed in science articles, and the reader in this case might still believe the article's conclusion due to extension neglect.

Eldar Shafir

Eldar Shafir is an American behavioral scientist, and the co-author of Scarcity: Why Having Too Little Means So Much. He is the Class of 1987 Professor in Behavioral Science and Public Policy; Professor of Psychology and Public Affairs at Princeton University Department of Psychology and the Princeton School of Public and International Affairs.

<i>The Undoing Project</i> 2016 book by Michael Lewis

The Undoing Project: A Friendship That Changed Our Minds is a 2016 nonfiction book by American author Michael Lewis, published by W.W. Norton. The Undoing Project explores the close partnership of Israeli psychologists Daniel Kahneman and Amos Tversky, whose work on heuristics in judgment and decision-making demonstrated common errors of the human psyche, and how that partnership eventually broke apart. The book revisits Lewis' interest in market inefficiencies, previously explored in his books Moneyball (2003), The Big Short (2010), and Flash Boys (2014). It was acclaimed by book critics.

David Gal is Professor of Marketing at the University of Illinois at Chicago. He is best known for his critiques of behavioral economics, and in particular his critique of the behavioral economics concept of loss aversion. His forthcoming book is titled The Power of the Status Quo.

References

  1. 1 2 Altman, Daniel (10 October 2002). "A Nobel That Bridges Economics and Psychology". The New York Times. Retrieved 14 March 2009.
  2. Goode, Erica (5 November 2002). "A Conversation with Daniel Kahneman; On Profit, Loss and the Mysteries of the Mind". The New York Times. Retrieved 14 March 2009.
  3. Haggbloom, Steven J.; Warnick, Renee; Warnick, Jason E.; Jones, Vinessa K.; Yarbrough, Gary L.; Russell, Tenea M.; Borecky, Chris M.; McGahhey, Reagan; et al. (2002). "The 100 most eminent psychologists of the 20th century". Review of General Psychology. 6 (2): 139–152. doi:10.1037/1089-2680.6.2.139. S2CID   145668721.
  4. 1 2 A Psychologist Who Shed Light on Our Irrationality Is Born Haaretz, 16 March 2016
  5. 1 2 Priceless: The Hidden Psychology of Value By William Poundstone
  6. 1 2 3 4 5 Lewis, Michael (2017). The Undoing Project. New York: W. W. Norton & Company. ISBN   978-0-393-35610-6.
  7. Kahneman D, Frederick S (2002). "Representativeness Revisited: Attribute Substitution in Intuitive Judgment". In Gilovich T, Griffin DW, Kahneman D (eds.). Heuristics and Biases: The Psychology of Intuitive Judgment. Cambridge: Cambridge University Press. pp. 51–52. ISBN   978-0-521-79679-8.
  8. "Amos Tversky, leading decision researcher, dies at 59". Stanford University News Service. 1996-06-05. Retrieved 2017-12-25.
  9. "The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2002".
  10. Michael Lewis. "The Undoing Project: A Friendship that Changed the World". Penguin, 2016 (ISBN 9780141983035)
  11. Fox, Craig R.; Amos Tversky (1995). "Ambiguity Aversion and Comparative Ignorance". Quarterly Journal of Economics. 110 (3): 585–603. CiteSeerX   10.1.1.395.8835 . doi:10.2307/2946693. JSTOR   2946693.
  12. "The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2002".
  13. 1 2 3 "Amos Tversky, leading decision researcher, dies at 59".
  14. "National Academy of Sciences". nas.nasonline.org.
  15. "2002- Daniel Kahneman and Amos Tversky". Archived from the original on 2015-07-23.
  16. "The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2002".
  17. "The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2002".
  18. Kahnemnan, quoted in Michael Lewis, "The Undoing Project: A Friendship that Changed the World". Penguin, 2016 (ISBN 9780141983035)
  19. Tversky..." didn't have Danny's feeling that we should all think together and work together. He thought "F*** You". Walter Mischel, quoted in Michael Lewis, "The Undoing Project: A Friendship that Changed the World". Penguin, 2016 (ISBN 9780141983035)
  20. "People live under uncertainty whether they like it or not..... Man is a deterministic device thrown into a probabilistic Universe. In this match, surprises are expected." Notes made by Tversky for a scientific paper. Michael Lewis. "The Undoing Project: A Friendship that Changed the World". Penguin, 2016 (ISBN 9780141983035).
  21. Freeman, Karen (6 June 1996). "Amos Tversky, Expert on Decision Making, Is Dead at 59". The New York Times. Retrieved 14 March 2009.
  22. Engber, Daniel. "How a Pioneer in the Science of Mistakes Ended Up Mistaken". Slate Magazine, 21 December 2016. "It's a portrait of besotted opposites: Both Kahneman and Tversky were brilliant scientists, and atheist Israeli Jews...
  23. Malcolm Gladwell, David and Goliath: Underdogs, Misfits, and the Art of Battling Giants, 2013, page 103
  24. Engber, Daniel (21 December 2016). "The Irony Effect". Slate. Retrieved 26 January 2017.